TMI Blog1991 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule. Thus, the liability to pay the tax is imposed, inter alia, on the person who exercises any calling or is engaged in any trade specified in the second column of the Schedule to the Act. Persons referred to in serial Nos. 2, 3 and 8 of the Schedule who have attained sixty-five years of age are exempted from payment of tax, as per the first proviso to section 3(2). Serial Nos. 2 and 3 of the Schedule refer to legal practitioners, medical practitioners, technical consultants, etc., and serial No. 8 refers to self-employed persons in the motion picture industries. The idea is to exempt persons who exercise any profession or calling requiring certain special knowledge or skill in the subject concerned and who have attained the age of 65 years. The Legislature, in its wisdom, has resolved not to impose the burden of tax on such persons (who are above 65 years of age), having regard to the peculiarities of the particular profession or calling. These professions of law, medicine and self-employment in motion picture industry are classified distinctly and treated differently from other kinds of trade or employment. Earlier, the maximum rate of profession tax permitted to be leviabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calling it as a 'nursing home' inviting a higher rate of taxation tinder entry 20C(a). The levy of tax, depending upon the place of carrying on one's profession is arbitrary. (ii) This apart, Dr. Sattur has already attained the age of 65 years ; therefore, as a medical practitioner, he is not liable to pay the tax. But, by referring to his activity as a 'nursing home', tax is levied, under entry 20C; this again is a statutory classification for which there is no real basis. (iii) Article 14 is also contravened, because nursing homes are not classified rationally. Irrespective of their income, capacity, location, nature of the facilities available, and such other relevant factors which distinguish one nursing home from another, all are treated similarly and the same rate of tax is levied ; thus lack of classification renders the impugned entry void. Re : Contention I : Sri Kotavale, learned counsel for the petitioners, took us through the various entries in the Second Schedule. Invariably, the second column refers to living persons or artificial persons such as " legal practitioners ", " race horse owners ", " self-employed persons "employers of establishments ", " owners of oil-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as there may be inaccuracy and inconsistency ; you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it'. And said Lord Davey : 'Every clause of a statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter'. It is spoken of as construction ' ex visceribus actus . 'It is the most natural and genuine exposition of a statute', laid down by Lord Coke 'to construe one part of a statute by another part of the same statute, for that best expresseth the meaning of the makers'. To ascertain the meaning of a clause in a statute the court must look at the whole statute, at what precedes and at what succeeds and not merely at the clause itself ; and, 'the method of construing statutes that I prefer', says Lord Greene, M. R. 'is to read the statute as a whole and ask oneself the question : " In this state, in this context, relating to this subject-matter, what is the true meaning of that word " ? 'As stated by Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a given situation was within the direct contemplation of the draftsman as the situation calling for statutory regulation : this may be called the primary situation. As to this, Parliament will certainly have manifested an intention. The Primary Statutory Intention. But situations other than the primary situation may present themselves for judicial decisions secondary situations. As regards these secondary situations, it may seem likely in some cases that the draftsman had them in contemplation ; in others not. Where it seems likely that a secondary situation was not within the draftsman's contemplation, it will be necessary for the court to impute an intention to Parliament in the way I have described, that is, to determine what would have been the statutory intention if the secondary situation had been within parliamentary contemplation (a secondary intention)'." The legislative intention is quite clear in the instant case. The subject of the tax is the profession, trade, calling, employment, etc. A trade or a profession as such cannot pay the tax. Therefore, the tax is payable by the person who is engaged in the particular profession or trade, etc. harmonious reading of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n up establishing the nursing homes or hospitals. There is no comparison at all between entry 2 and entry 20C(a) and hence the question of discrimination between the two does not arise. The unit of taxation is the particular trade, profession, calling, etc., and, therefore, by treating a particular trade, profession or calling as single unit, without further classifying it into different categories, cannot be per se discriminatory. In the sphere of taxation, the Legislature has a wide discretion to choose the subject of taxation, microscopic clarification of the subject depending upon the capacity is not absolutely necessary. The alleged discrimination should be established as patently arbitrary and hostile to the very subject of taxation before it can be struck down. Even a small nursing home would require a couple of beds, one or two nurses and a few employees and a person who could organise such a nursing home and pay rent for the place (or investing on the premises), should be capable of paying at least Rs. 2,500 per annum as tax for the trade or business in which such a person has invested quite a good amount. The petitioners have riot shown that this nursing home is incapab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g justice, but merely in the absence of that, it cannot be said that the legislative act is invalid. In Murthy Match Works' case, AIR 1974 SC 497, referred to earlier, there was a classification already in existence between those who are carrying on the activities by using power and those who are not and the classification was withdrawn. The Supreme Court observed, while withdrawing the classification, that if there is broad classification, that is enough and there need not be any micro-classification." This decision is affirmed by the Bench, vide Sri Banashankari Leasing Co. Ltd. v. State of Karnataka [1992] 194 ITR 650 (Kar) ; ILR 1991 Kar 2238. In Twyford Tea Co. Ltd. v. State of Kerala, AIR 1970 SC 1133, a flat rate of taxation on plantations irrespective of their income was upheld. At page 1138, the Supreme Court pointed out that the " burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack ". (underlining is ours). An American decision was quoted as laying down the principle: "In taxation even more than in other fields, Legislatures possess the greatest freedom in classification. The burden is on the one attacking the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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